Why has HMRC hypocritically let tax avoidance adviser David Heaton resign?

A wolf in wolf's clothing?

David Heaton resigned as an adviser to HMRC on tax avoidance last week after it emerged that he was a wolf in sheep’s clothing – despite having been hired precisely because he was a wolf.

Speaking two months ago at a conference in London, for which tickets cost up to £1,000, Heaton had advised employers on how to avoid tax on bonuses by exploiting maternity pay, so tax paid was 8.4 per cent compared to the initial 41.8 per cent.

When the scandal broke and his former role was revealed by a BBC/Private Eye investigation, the Treasury welcomed his resignation. Ministers and Treasury spokespeople have put across how shocked – shocked! – they are that someone they retained for his knowledge of tax avoidance turned out to have been advocating, um, tax avoidance.

Now, it is not necessarily right that businesses try to avoid tax, but they do. Hundreds of highly-paid individuals are employed by companies to keep profits from the taxman. They are internally lauded for this, as you would expect.

But it is exactly these people the government should be using to fight back against such inexcusable abuses of the tax system. Forcing them out following shameful revelations highlights a margin of morals but doesn’t balance the books.

Perhaps worst of all, a company Heaton has worked for gives seminars entitled "50 Shades of Tax", aimed at "anyone who loves tax, and anyone who doesn't but still pays it!" There is something tragic in the comedy. Not only do people avoid tax with base swindling schemes but people make money in advising others to do so.

Perhaps the Treasury should take note and see crushing tax avoidance as business: invest in advisers, secure profit, reinvest. They can start by getting poachers such as David Heaton to repay their social debts by turning gamekeeper.

Read more by Alex Matchett

This piece first appeared on Spear's Magazine.

Photograph: Getty Images

This is a story from the team at Spears magazine.

Photo: Getty Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.